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Informist, Tuesday, Feb. 24, 2026

 

NEW DELHI – The Supreme Court Tuesday directed the Mumbai bench of the National Company Law Tribunal to admit Catalyst Trusteeship Ltd.'s insolvency plea against Ecstasy Realty Pvt. Ltd. for not paying more than INR 12 billion dues. "We find the present case to be one such case, where the perversity of the findings recorded by the NCLT and by the NCLAT is glaring and manifest, beseeching interference by this court at the second appellate stage," said a bench of Justice Sanjay Kumar and Justice K. Vinod Chandran.

 

Though, the National Company Law Appellate Tribunal was persuaded to record that Ecstasy Realty, having received INR 6 billion of INR 8.50 under the debenture trust deed, had already repaid INR 5.08 billion, it lost sight of the passage of time, whereby the principal coupled with the interest due were much higher, said the top court. This resulted in gross disparity between what was claimed by Ecstasy Realty and the reality of the amount actually due and payable by it, the court added.

 

"We, accordingly, hold that the NCLT and the NCLAT erred in ignoring the binding terms of the debenture trust deed dated 27.03.2018 (Mar. 27, 2018) and in reframing the terms thereof on the strength of surmises, conjectures and assumptions, which were not borne out on facts and were completely unsustainable in law," said the top court. The insolvency petition filed by Catalyst Trusteeship, the debenture trustee, deserved to be admitted under Section 7 of the Insolvency and Bankruptcy Code, 2016, the court said.

 

The appellate tribunal's notion that Catalyst Trusteeship was required to act with fairness and protect the interest of Ecstasy Realty was contrary to the duty and obligation cast upon the debenture trustee under the debenture trust deed, which is to protect the interests of the debenture holders, said the court. The finding that Catalyst Trusteeship acted in unison with the debenture holders in catalysing their dubious designs to drag Ecstasy Realty towards insolvency was, therefore, incorrect, it said.

 

Ecstasy Realty had proposed to build a residential-cum-retail project in Mumbai and to meet its requirement of funds in that regard, it proposed to issue 850 redeemable non-convertible debentures of the value of INR 8.50 billion in two series, Series A and Series B in 2018. Thereafter, Catalyst Trusteeship was appointed as debenture trustee on behalf of debenture holders. Series A debentures to the tune of INR 6 billion were fully subscribed by the debenture holders and the entire amount was disbursed to Ecstasy. ECL Finance Ltd., Edelweiss Finvest Pvt. Ltd., Barbelo Estates LLP, an entity of the Edelweiss group, and other directors and associates held these debentures. Series B debentures, amounting to INR 2.50 billion, never came to be issued.

 

In 2022, Catalyst Trusteeship trustee issued a loan recall notice, requiring the respondent company to pay the entire dues with interest thereon, amounting to INR 12.04 billion. Thereafter, Catalyst Trusteeship filed an insolvency petition in the Mumbai tribunal against Ecstasy Realty. 

 

In 2023, the Mumbai tribunal noted that a moratorium was already in place pursuant to the negotiations between Ecstasy Realty and one of the debenture holders. Observing that insolvency proceedings were not in the nature of recovery proceedings, the Mumbai tribunal dismissed the company petition, which was upheld by the appellate tribunal in 2025. Challenging these orders, Catalyst Trusteeship moved the top court.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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